Yahoo Finance SMGZY vs. PLTR: Which Stock Should Value Investors Buy Now?
Investors interested in Technology Services stocks are likely familiar with Smiths Group PLC (SMGZY) and Palantir Technologies Inc. (PLTR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Smiths Group PLC has a Zacks Rank of #2 (Buy), while Palantir Technologies Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SMGZY has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SMGZY currently has a forward P/E ratio of 16.41, while PLTR has a forward P/E of 77.75. We also note that SMGZY has a PEG ratio of 1.67. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PLTR currently has a PEG ratio of 2.90.
Another notable valuation metric for SMGZY is its P/B ratio of 2.60. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PLTR has a P/B of 14.74.
Based on these metrics and many more, SMGZY holds a Value grade of B, while PLTR has a Value grade of D.
SMGZY sticks out from PLTR in both our Zacks Rank and Style Scores models, so value investors will likely feel that SMGZY is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Smiths Group PLC (SMGZY) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
